This post, Beatriz is for my fellow Obanos, asking me about economics, and sometimes it is difficult to explain things, because I have many concepts clear she did not.
Let's start ...
Intro:
Most people believe that economics is complicated. It is. But, at certain levels is understandable. Also most people think they know nothing of it. False. Economics is what you spend in your home, you save, what you choose to spend, where to go on vacation (if you or those you can afford it), buying an apartment, etc..
Definition of Economics: Economics
, dubious word. Economics explained to me, a professor of this matter in the race, which is choice, choose the correct path, the right choice.
Economics is also given. For example, I bought a new car, or I go on vacation to the Caribbean. I buy a book, or buy oysters for dinner. "I can change the car this year? Can I go on vacation? This is an exaggeration, but that is what governments do, and citizens at all times with their money. "Spending for education or health spending? "We got the pay of retired officers or social assistance? (Or both) I spend it on X, or Z. At the end is to decide where we spend what we enter.
The problem of economics, in this case of national or global is governed by "laws" which are less so. Let me explain. Most laws are deduced after watching the aconteciomientos (also my teacher told me). Economics is not able to guess what will happen. Only signs. Another problem is that the world is globalized, that is, what happened yesterday in the U.S., when they go to sleep, affects what happens in Europe this morning. And the whole package of money in circulation, the budgets of each country, the world's banks and all we can think that is economy in global terms, they call this Macroeconomics. (More or less, and walk home.)
Microeconomics is the study of the behavior of consumers and businesses. This is easier to predict. For the simple reason that consumers have the bad habit of eating and try to live your best.
There are some variables such as prices of goods (eg: bread, milk, eggs) and services (vacations, dentist), the level of wages, profit margins (which earned the company for goods and services we buy ) and changes in income (up or down the lists of each).
All consumers and businesses make decisions trying to get the most satisfaction possible. Improve the usefulness of what they spend.
For example, buying a car at a very low price you like, and provides utility to go on vacation, and to transfer you to work, produce more profit and satisfaction, to buy an expensive car, sports (which can not move the family, friends and luggage on vacation). Yes, very nice, but impractical, so we ended up not producing much satisfaction. And the quality of service we will produce, in general, is not the same as a utility, cheaper and more practical.
Also, if you change your car this year or you expect next year, because it can still work, and expect next year to improve your economy, a change work, or other circumstances ... At all times we Economics. Simplifying
another variable, the more expensive a product, the less you consume. The oysters are consumed soon, as its market price is high. There are always things that are called "first necessity", that however much the price rises, the consumer tries to purchase and consume. Up to a limit, of course. Everyone eats bread (well, except me I'm on a diet). The price of bread, you can upload, but we all have the bad habit of buying bread, and the final purchase. Aggregate demand
The price can change the attitude of a consumer purchase. More money, less purchase. Less money, more shopping. Whether you go up, as if low, there is also a limit. For very cheap bread that is not going to buy 50 bars. And if it is expensive, as I said, buy the necessary, but buy. These behaviors can be predicted in general terms. (There are economic terms that can explain these phenomena I am explaining is called "aggregate demand".)
However with the story, something inexplicable happened. Rose and rose, and people kept buying ... until everything exploded. Normal. It happened that as they were rising steadily, people hurry to buy, lest in a month more expensive.
Even those who bought for especular, y obtener beneficios. Compro por 3, vendo por 5. Vuelvo a comprar por 5 y vendo por 7. Hasta que se los han comido.
Y luego están los que tenían la necesidad, y les ha tocado un mal momento. Pero con los tipos de interés tan bajos, ¿cómo se iban a contener en comprar un piso de 40 millones de pesetas con dos sueldos de "mileuristas"? La gente sólo ha pensado en el momento, no en lo que pudiera llegar...que ha sido, lo que tenemos...y tampoco era tan difícil de predecir...Leopoldo Abadía hablaba en 2007 de la crisis...de lo que se venía encima...Yo mismo en 2008 escribí varios post en este Blog.
Volvemos a retomar
Demanda agregada
Esta demanda agregada, can be seen as amended by:
- If the government applies a lot of taxes to citizens.
- If the government spends a lot, invest, apply spending on goods and services (buying services and buying "stuff" that may or may not be necessary for the functioning of the country).
- For the money available within a country: What we can provide the banks and the interest rate that has the money (interest rate is the price we pay for borrowed money). The greater the amount of money, the greater the aggregate demand or increase the interest rate reduces aggregate demand.
aggregate demand curve slopes downward: if prices people want Buy less and buy more if you want to go down.
Normally, all Governments have reversed the aggregate demand. All. Both left as the right. It's your game, your way of influencing a country's economy, and therefore what we eat them all.
+ money = more demand = more consumption aggregate.
- aggregate demand = less money = less consumption. A
governments are interested in the mass consume, consume the city. Why?
If I consume, pay taxes, direct tax (VAT) and indirect (income tax). If I use the money moves, and all have money, but only relocate. That is what is called activación de la economía. Una economía es activa, cuando el dinero circula, y tiende a que la economía suba, crezca. Por tanto, si el gobierno gasta dinero, nos dejan el dinero barato (intereses) y nuestros sueldos van creciendo año a año, la economía de un país tiene que crecer. Y la Economía de España estaba en alza, crecía todos los años...hasta que ya no ha crecido...se ha caído, a niveles negativos (deflacción).
Ahora bien, qué ha pasado con nuestra economía.
Jejejejje
Leopoldo Abadía lo ha expresado muy bien, y creo que yo no voy a poder hacerlo mejor, pero utilizaré sus palabras o sus expresiones para una mejor comprensión.
The money flowed very well in our country ... The growth seemed unstoppable ... all lived happily ever after. Unbridled joy, that in economics is at a premium.
Money was cheap, interest rates were low.
banks lend money to each other.
speak of these ... would mean a lot ... "Thieves, no levers, no media" La Polla Records (1987).
U.S. banking, was lowering the price of money without control ... 6% to 1%. The banks lent money. But they were not getting benefit. This pissed them so superhuman. A bank without earning money ... it is contradictory in itself.
Began looking for new customers ... and began to control who or how little money was loaned. (They call this Subprime loans) An officer, for example, will always be valued as Prime.
Someone without a stable job, or that has nothing to endorse him back, if you lose your job, is a Subprime. Leopoldo Abadía calls Ninjas: no income, no job, no assets, that is, people without regular income, no fixed employment, no properties.
But, but, but, everything in life is not given for free ... these Subprime lending the money are a little more expensive ... for that risk ... and if not paid ...
In Spain, as prices of flats, which is primarily for what the Subprime / Ninjas calling for the money, rose and rose, as did the bank accounts in the event that the ninja does not pay, the floor price will have risen, and not lose.
Moreover, banks are required to support the loans ... a few%, you have to have on hand, we who have to have the money physically real. As many loans granted, many, many, and they are running out of money to lend, and credit support ... well not think of anything else to borrow from other banks ...
banks begin to accumulate bad loans (full of Subprime / Ninjas). But they happen to create packages of these loans, credits good mixing with bad credit. And by selling these packages to other banks ... And the packages are bought and sold ... and lending money to each other ... what happens is that in the end nobody knows what is in the packages ... FATHER LIADA
One day, we woke up and the U.S. begins to loosen its economy ... lower slowly. Prices of flats plunge ... ninjas lose their jobs. Not pay their mortgages.
not find another job ninjas.
Banks do not know what to do. Automatically
packages nobody nobody buys.
banks do not lend money when they go to Interbank (interbank market, which is where banks lend money to each other, or lend it, or lend it expensive.)
As banks have no money:
A) sell their holdings in
B) Sell the buildings
C) metamos campaign for money, offering better
As people begin to feel squeezed by the mortgage payment, is less to buy.
As stores realize it, they buy less from the manufacturer.
The manufacturer believes that as a sell less, starts to staffing and fire a few.
And this is reflected in the unemployment rate.
Banks do not lend money.
and construction companies do not sell stories.
can not pay their workers.
Constructors can not pay their employees.
Employees do not pay their mortgages.
is not consumed. No one spends, so it is not entered. The State does not collect taxes.
employees are unemployed. (They use state resources)
Money held by the State for social assistance is not infinite. Can be finished.
Year 2010: has run the state's money.
May 2010: wage cuts, cuts in social benefits.
4,600,000 unemployed.
The other day a friend with whom I was talking about these issues said, "Do not expect anyone to fix it. We will overcome you and me, helping me and you. With no one else. We will take this forward we, as always. But without waiting for, or rely on anyone's help. That is the real problem in Spain, we always think that someone, finally, we draw the chestnuts out of fire. The damn subsidies, grants and other deceptions to alter the market, finance and economics. "
The truth is that right, at least in one thing, sure, in the end, we help each other to go out ... do not expect anything "Papa State", or their brother "The Banker". We lend money and help from friends to get out of this ... no more ... I hope
Beatriz you can understand more the economy.
Hugs, Guillermo
Thanks to Leopoldo Abadía, to borrow a few lines ...
With Javier Pomar, father and son.
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